But critics worry that consolidating so much market power in a single servicing company is risky, with echoes of the too-big-to-fail institutions that fueled the 2008 housing crisis.“We’ve already seen a real lack of accountability among the servicers in helping people manage their repayments, which should be the real priority,” said Cody Hounainan, program director at Student Debt Crisis, a nonprofit advocate for borrowers.But even with scholarships and Federal grants, most students will face a gap in their college fund that requires a student loan of one form or another.
When it comes time to start thinking about college, students need to consider all forms of financial aid.
Scholarships and grants are always the preferred form of financial aid as they do not require repayment, and can be considered free money.
Under the current system, servicers have come under criticism from consumer advocates and even faced lawsuits from regulators for not doing enough to help borrowers find manageable repayment plans, including federally mandated options.
, the Consumer Federation of America in part blamed servicers for a rise in student-loan defaults.
The government can only take 15% of your disposable income.